Friday: China soy futures settle down; strong dollar weighs

 

 

China's soy futures traded on the Dalian Commodity Exchange settled lower Friday, weighed down by a strong dollar and tracking the overall fall in outside markets.

 

The benchmark September 2010 soy contract settled RMB84, or 2.1%, lower at RMB3,954 a metric tonne.

 

The contract opened lower, tracking a stronger dollar and the big fall on the Chicago Board of Trade overnight.

 

Downward pressure from the dollar increased; U.S. soy are likely to test US$10/bushel, said Capital Futures in its note, adding further downward correction will start once the level is tested. January soy on CBOT ended down 37 1/2 cents at US$10.22/bushel overnight.

 

"There aren't concrete negative factors in soy fundamentals, and the fall was due to the dollar," said Galaxy Futures in its note.

 

The fall in equities also weighed on commodities' sentiment, resulting in profit-taking ahead of the year-end book closing dates.

 

Analysts said soy prices will likely be more volatile as year-end approaches, as the dollar may continue to remain strong for a while.

 

The trading volume of all soy contracts declined to 532,796 lots from 641,204 lots Thursday.

 

Open interest fell 9,828 lots to 399,122 lots Friday.

 

Corn, soymeal, palm oil and soyoil futures all settled lower.

 

Friday's settlement prices in yuan a tonne for benchmark contracts and volume for all contracts in lots (one lot is equivalent to 10 tonnes):

 

Product    Contract      Settlement Price     Change     Volume

Soy         Sep 2010      3,954          Down   84    532,796

Corn       Sep 2010      1,864          Down   11     73,182

Soymeal  Sep 2010      2,954          Down   55  1,181,580

Palm Oil  Sep 2010      6,950          Down  126    511,514

Soyoil     Sep 2010      7,794          Down  152    924,728